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Navigating into lucrative US waters

As Canadian, American and international partners prepare for the Coalition Warrior Interoperability Demonstration (CWID) in June, one Vancouver company is enjoying the results of its 2005 participation.

Offshore Systems International (OSI) received high marks for its Common Operational Picture Product Line (COP PL), a web-based navigation system designed to enhance geographic situational awareness and interoperability.

The CWID final report, released in February, found the COP PL met all expectations during the three-week assessment and was “ready for fielding.”

The annual event, led by the US with participation from Canada, the UK, Australia, New Zealand and NATO, evaluates new, evolving and commercially available technologies that improve joint, combined or coalition interoperability.

For companies, CWID is an opportunity to have a product put through its paces in a real world scenario, operated by interested militaries. While some products have failed miserably, others have excelled and quickly been adopted.

“It’s a great marketing tool to get all the forces that are involved in this program introduced to your technology,” said Ken Kirkpatrick, president and CEO of OSI. “A good report doesn’t mean someone picks up the phone and places an order for $3 million, but it does create visibility and interest for those discussions to begin and develop into real business.”

OSI’s warship navigation system is already deployed in the US, Canadian and Danish navies, and the company is in discussions with Australia, New Zealand, Portugal and Norway.

In addition to its main participants, CWID attracts a number of observers, including Russia and the Czech Republic.

“The exciting part of our opportunity is that a lot of countries are very concerned with national security and homeland defence,” Kirkpatrick said. “Our technology allows military services – the air force, army and navy – to share information, but it also allows sharing of information with coalition partners and within country – for the navy and coastguard to communicate and share information with police, customs and others.

“We see the homeland defence side of the equation as a big part of the business plan moving forward.”

OSI began 25 years ago with the grand concept of incorporating electronic navigation into commercial and military vessels. “We are just now seeing in the last three years electronic navigation really kicking in, especially on the military front,” said Kirkpatrick. The company may have been ahead of its time then, but it is attracting plenty of attention now.

While it continues to build its relationship with the Canadian navy – in March, it was awarded $450,000 contract for fleet-wide software upgrade – its focus is the lucrative US market.

“We’re positioning in a very big way to go after the US market,” Kirkpatrick acknowledged. “We really believe we have superior technology and we have been limited or restricted to some degree by being a Canadian company.”

In December, OSI acquired CHI Systems for $9 million, a Philadelphia company with strong ties to the US military. “Where we’re strong on the marine side, they’re very strong on the land,” noted Kirkpatrick. “They have complimenting products to our top line.

The move paid immediate dividends when the warship navigation system was adopted by a number of US DOD programs testing future capabilities on advanced combatant vessels, including the M80 Stiletto, an operational experimental craft for the Pentagon’s Office of Force Transformation; the stealth, semi-submersing speedboat SEALION II (SEAL Insertion, Observation, Neutralization) for Naval Special Warfare; and the US Navy ship, Joint Venture High Speed Vessel Experimental One (HSVX-1).

In March, OSI strengthened its board of directors with the appointments of Dr. Marvin Sambur, a former US Air Force assistant secretary for acquisition, George Sawyer, founding partner of J.F. Lehman & Company and a former CEO of Sperry Marine, Joseph Stroud, a partner of General Management Partners LLC and a former VP and CFO of Sperry Marine, and Donald Young, retired audit partner of KPMG LLP.

Not only did the appointments increase marine expertise, they also improved financial and corporate governance, Kirkpatrick said, a sign the company may be catching up with its visionary past.

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